A special warranty deed is a type of deed that provides limited guarantees from the grantor (seller) to the grantee (buyer). Unlike a general warranty deed — which warrants against all title defects throughout the entire history of the property — a special warranty deed only warrants against defects that arose during the grantor's period of ownership. The grantor makes no guarantees about what happened before they acquired the property.
The practical effect is significant. If a title defect is later discovered that originated before the seller owned the property — say, an old forged deed or an unresolved lien from a previous owner — the buyer has no claim against the seller under a special warranty deed. The seller only promised that they didn't create any title problems during their ownership. With a general warranty deed, the buyer could sue the seller for any title defect, regardless of when it originated.
Special warranty deeds are commonly used in specific transaction types where the grantor has limited knowledge of the property's full title history. Bank-owned properties (REO) from foreclosure are typically conveyed by special warranty deed — the bank only owned the property briefly and cannot warrant its entire history. Estate sales, trustee sales, corporate sales, and government conveyances frequently use special warranty deeds for the same reason.
For buyers receiving a special warranty deed, owner's title insurance becomes especially important. The title insurance policy provides coverage for defects from all periods of ownership — not just the seller's period. If a pre-existing defect surfaces that the special warranty deed doesn't cover, the owner's title insurance policy steps in to protect the buyer. This is one reason why title insurance is recommended for every transaction, regardless of the deed type.
At Beycome Title, we prepare the appropriate deed type for each transaction and explain the differences to all parties. For standard residential purchases, we typically prepare general warranty deeds. When a special warranty deed is appropriate, we ensure the buyer understands the limitation and strongly recommend owner's title insurance for full protection. Get your free closing quote.